Last week I wrote about having heard Cramer make some sort of call on oil stocks to either get out completely or reduce exposure a lot. I noted I was in my car and did not hear exactly, so far no one commented on what he specifically said.
The process behind the call had to do with a big drop in the price of oil that day.
The tone of my piece was that I had already reduced beta in the sector but that I was still overweight and that I had no plans to cut back now. For the week since Cramer's call it probably made more sense for longer term investors to have made no changes.
Cramer could turn out to be correct about oil topping out at $67.10, I don't know. Neither do you and neither does he. Everyone has an opinion but no one knows.
I have been writing about oil as a major theme in my client accounts throughout the life of this blog. The theme has been working for a couple of years now and I will either be right or wrong about it working for the next few years. The point here is that I don't think it makes sense to give up on a theme because of price action on one day.
Individual stocks may be another story.
Wikinvest Wire
4 comments:
I read Cramer's article. I replied and told him I was HOLDING my energy holdings. I remember when he was warning investors away from tech stocks several years back at the bottom of the market. I bought the Qs then, which I recently sold at a handy profit. He is now telling investors to get in tech. I don't have a feel for that call, and I'm NOT suggesting Cramer is a contrarian indicator, but I agree with your point: Nobody knows.
great comment. thanks for the chuckle.
Well, I can go back to September of '04 and draw a straight trendline under four points. WTIC is above trend now so a decline to trend would be expected. Think $55 oil by Halloween and then up and away again.
I'd also not suggest Cramer is a contrarian indicator: that might imply too much consistency. See http://www.seekingalpha.com/2005/06/cramer_the_coin.html
I think there was another reference to the Jim Cramer oil commentary on seeking alpha as well, but couldn't put my finger right on it.
http://guambatstew.blogspot.com/
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